Re: Deductions
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What if you was on the road 300 days and you hired your kid to come into your home office and search for loads for you.and say you have someone take care of the place a groundskeeper would you then take the home office deduction and groundskeeper pay?
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Hi JB,
1.First of all do you have your own authority
2. hiring a KID????, how old and what does he know about trucking. if you have a laptop, you can do that from the road.
3. If your Married and your wife does not work, she can do it but you would have to keep track of how many hours a day the home office is actually used,
4. The home office is also based on the area of the room that you are using, and it must not contain, a TV, Sofa, Recliner, or any other personal property. except a desk, computer, printer, desk chair, business telephone line, and only office supplies, and anything for a regular office. I know he or she will not stay all day to moniter the load boards. Loads are not normally are ready for posting until around Noon of each day.
5. if you are going to pay for his services, he will have to be an employee, if not related, and you would have to pay federal withholding tax, Social Security and Medicare tax, Have a payroll checking account, pay quarterly payroll taxes, and provide workmens compensation for your employees. Plus you would also have to have a separate checking account for your business no matter what, it would be easier for you if you are audited, and I know for a fact that the IRS in an audit would want to see your business checking account, and your business payroll account. they have to be 2 separate accounts.
6 As far as a Landscaper/Groundskeeper, yes he is a listed deduction and not part of your home office, If you pay him over $600, you have to make out a 1099MISC to him for the $$$ as income to him. and an deduction for you as contract labor.
7. The home office deduction is based on the following:
1: Square footage of the room you are using for the office.
2: Total square footage of your total living space in the home. including basements, garage, etc
3. other expenses that pertain to the home, Mortgage Interest, Real estate Taxes, Utilities, electric, gas, garbage, water, sewer. repairs, landscaping, fencing, etc.
4. here is the way it works, the total area of the home, x the area of the office will give a percentage of the home office deduction by the hours used,.
that percentage inturn is expensed by that percentage, so all of the items mentioned in #3 will be figured by that percentage.
5 so if your house is 2000 square feet, and your office is a 8x10, which is 80 square feet, using the math, you would be at roughly 16% use, so only 16% of the total above would be deducted plus the depreciation of the house., the difference of the mortgage interest, real estate taxes would carry over to your Schedule A ( itemized Deduction) and if your itemized deduction add up ot less than $11,400, the Schedule A would be disallowed and the standard deduction would be used. the actual deduction would be figured on your Schedule C, after all other expenses are deducted if you are a sole propreitor.
I will be glad to answer any question that you would like to know about, if I do not know the answer, please give me about 4 days to investigate you question.
Or if you would like please email me directly at
[email protected]
Franklin Katz, ATP, PA, PB
Franks Tax & Business Service
120 York Rd
Kings Mountain, NC 28086
(704) 739-4039
Fax: (704) 739-3934
Circular 230 Disclaimer - Any tax advice in this communication (including any attachments) is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of (1) avoiding tax related penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any transaction or tax-related matters addressed herein.
